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UNITED STATESNUCLEAR REGULATORY COMMISSION

OFFICE OF NUCLEAR MATERIAL SAFETYAND SAFEGUARDS

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COMMISSIONER LYON'SBRIEFING PACKAGE

WESTERN NUCLEAR INCORPORATEDURANIUM MILL SITE

JEFFREY CITY, WYOMINGMay 19, 2005

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CONTENTS

AGENDA. .

FACILITY DATAFacility DataFigure 1 .

.1A

* . .2. 3

FACILITY PERFORMANCEFacility Oversight Program Info . . . . . 4Current Issues . . . . . . . 5

FACILITY MANAGEMENT DATAFacility Organization . . . . . . . 7Biographical Data of Meeting attendees . . . 8

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TAB 1A

Drop-In Visit AgendaMay 19, 2005

ItineraryMeeting with Commissioner Lyons at 5:00 pm

Contact: Victoria Ibarra 301-415-8420

VISITORS REPRESENTINGWESTERN NUCLEAR INC.

* Anthony Thompson, Thompson & Simmons, PPLC (Counsel for WNI)* Chris Pugsley, Thompson & Simmons, PPLC (Counsel for WNI)

TOPICS OF DISCUSSION

* Delay in License Termination

G:\FCSS\FCLB\Uranium Recovery Section\Westem Nuclear\WNI Briefing Pkg 2005-05-19.wpd

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TAB 3Facility Data

Licensee: Western Nuclear, Inc.2801 Youngfield Street, Suite 340Golden, CO 80401(602) 234-8094

Location:License No.:Docket No.:License Status:Location of Meeting:Report Coordination:

Jeffrey City, WyomingSUA-5640-1162ReclamationNRC Headquarters, Rockville, MDWilliam von Till, NMSS, 301-415-6251

MANAGEMENT DATA

Licensed Activities: The Western Nuclear Inc.(WNI) site is a conventional uranium millcurrently under reclamation in accordance with 10 CFR Part 40, AppendixA. Mill operations commenced in 1958 and continued until 1981.Uranium ore processed at the mill was extracted in mines south of thefacility. The mill operations consisted of physical and chemical processesincluding sulfuric acid leaching. Decommissioning of the mill wascompleted on September 15, 1988. Surface reclamation is completeexcept for two evaporation ponds and several buildings. One largetailings pile is the main site feature covering 267 acres and weighing 12million tons. Two evaporation ponds are currently present to supportgroundwater corrective action. The site has several administrative andmaintenance buildings. The site is currently undergoing groundwaterremediation with an approved groundwater corrective action plan. Thelicensee has submitted an application for alternate concentration limits(ACLs). This application is under NRC review.

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I TOWN PROPERTY [ PRIVATE PROPERTY _ WESTERN NUCLEAR, INC. PROPERTY _ STATE PROPERTY COUNTY PROPERTY _ FEDERAL PROPERTY

_ McINTOSH RESTRICTIVE COVENANTS _ PETERSON RESTRICTIVE COVENANTS = CLAYTOR RESTRICTIVE COVENANTS PROPOSED LONG-TERM CARE BOUNDARY

.

I FIGURE 1WESTERN NUCLEAR, INC. SPLIT ROCK

LAND OWNERSHIP

Date: JANUARY 2005

Project: 003347/2004

File: PROPERTY-04.DWGI

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Facility Oversight Program Information TAB 5

The facility is inspected by NRC Region IV once every two years with technical support fromHeadquarters. Site visits are conducted as required to support licensing reviews. No oversightissues have been identified.

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Current Issues TAB 6

A. EXPECTED DISCUSSION TOPICS

Request for Alternate Groundwater Standards

WNI is implementing an approved groundwater corrective action plan (CAP) and has submitteda license amendment request for alternate concentration limits (ACLs). Approval of the ACLapplication would allow termination of the CAP. In addition, approval of the ACL application isthe last significant licensing action needed before license termination. However, WNI's analysisindicates that groundwater contaminated with site-derived constituents will migrate to privatelyowned lands within the next 100 to 200 years. WNI had proposed to use institutional andengineered controls on off site properties to protect public health and safety and theenvironment from the site-derived constituents in lieu of active corrective action. In a letter tothe NRC dated March 26, 2003, the U.S. Department of Energy (DOE), Grand Junction Office,provided comments on WNI's proposal for off site properties in the Red Mule subdivision.Among other comments, the letter stated that DOE did not intend to install nor maintain analternate water supply, as proposed by WNI, and questioned the concept that private propertiescould be included in the long-term care boundary.

The Commission determined that WNI should make a good-faith effort to purchase the off siteproperties, noting, however, that if this goal is not achievable, WNI would have to provide bothdurable and enforceable institutional controls. As a result, WNI focused its efforts on acquiringall of the properties in the Red Mule subdivision.

The staff received an update from WNI dated February 10, 2005. WNI has acquired all but oneof the off site properties in the Red Mule subdivision (Figure 1). In this submittal, WNI provideddocumentation of its acquisition of properties, institutional controls, and WNI's good-faith butunsuccessful efforts to acquire the one remaining property in the subdivision. This documentalso contains WNI's positions concerning reasonable assurance and DOE's comments on thealternate water supply.

A status report on this topic was provided to the Commission on March 23, 2005, via SECY-05-0047.

Request to Cease Groundwater Corrective Action

WNI, in a letter dated August 13, 2004, requested to cease groundwater corrective action at thesite so that it can expedite the reclamation of two evaporation ponds used as treatment forgroundwater recovery (August 13, 2004). WNI did not propose any alternatives to the NRCapproved groundwater corrective action plan. By letter dated January 7, 2005, NRC provided arequest for additional information (RAI) concerning the groundwater CAP. WNI has notresponded to this request. Staff determined that 10 CFR Part 40, Appendix A, Criterion 5Drequires that, if the groundwater protection standards established under Criterion 58(1) areexceeded at a licensed site, a CAP must be put into operation. The objective of the program isto return hazardous constituent concentration levels in groundwater to concentration limits set

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as standards. At the present time, groundwater standards have not been achieved. WNI hasnot proposed an alternative to replace the present CAP. Without an alternative, the staff isunable to proceed with its review of WNI's proposal to terminate the current CAP. If WNIwishes the staff to review its proposal, WNI would need to provide an alternative that complieswith 10 CFR part 40, Appendix A, Criterion 5D or with the alternate proposal provision in theIntroduction to Appendix A. This information was conveyed to WNI in the January 7, 2005,letter.

Request to Revise Groundwater Monitoring and Surface Water Monitoring

By letter dated May 24, 2004, WNI submitted a request to amend its license by modifying thecompliance monitoring network by reducing the number of monitoring wells, reducing thenumber of parameters to be analyzed, reducing sampling frequencies, and increasing thenumber of surface water samples. By letter dated November 10, 2004, the staff forwarded anRAI containing questions and comments regarding the number of wells in the proposednetwork, sampling frequencies, and mapping information. During the week of December 6,2004, WNI raised specific issues regarding aspects dealing with the Red Mule area and othertechnical concerns with NRC's comments and requested clarification of the RAI. WNI and theNRC discussed the issues, in general, via a teleconference on December 16, 2004, and ingreater detail via a teleconference on December 20, 2004. As a result, the NRC issued asupplement RAI on January 26, 2005, to which WNI responded on March 2, 2005. Staff is nearthe completion of this review and will hold a conference call in May 2005 to discuss anyremaining issues.

B. OTHER TOPICS OF INTEREST

Labor/Management Issues

None.

License Renewal Activities

None.

Escalated Enforcement

There has been no escalated enforcement within the last year. Also, no escalated enforcementfindings are pending.

Open Investigations

None.

Open Allegations

None.

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Congressional Interest

None.

Harassment and Intimidation Issues

None.

2.206 Petitions

None.

Selected News Articles

None.

Significant Reportable Events

None.

State Issues

The State of Wyoming has continued interest in the resolution of groundwater contamination atthe site.

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TAB 7

Facility Organization

President:

General Manager:

On-Site Staff:

Lawrence J. Corte (also, General Counsel with the parent companyPhelps Dodge)

Brad DeWaard

Four employees on-site performing site remediation tasks.

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Biographical Data of Visit Attendees TAB 8

ANTHONY THOMPSONThompson & Simmons, PPLC (Counsel for WNI)

Summary:

Anthony Thompson has been practicing environmental and occupational health and safety lawsince the mid-1970's. His practice includes legislation, regulatory counseling and litigationinvolving development of and compliance with environmental and natural resources, riskassessment and management, and occupational health and safety regulatory matters.

As primary outside counsel to the American Mining Congress (AMC), now the National MiningAssociation (NMA), for radioactive waste issues, he has represented virtually the entire domesticuranium mining and milling industry either as counsel to AMC/NMA or as a counsel toindividual licensees since the late 1970s. Thus, for over two decades, his practice hasencompassed radiation health and safety issues, including radioactive waste issues, issues relatedto releases of standards, standards relating to decontamination and decommissioning ofradioactive waste disposal sites, and constitutional issues related to federal preemption of AtomicEnergy Act materials.

Mr. Thompson also represented AMC/NMA on Clean Air Act Hazardous Air Pollutantregulatory proceedings and litigation, Safedrinking Water Act, coal and metal/non-metal minesafety and health and various clients including major corporations on health risk issues. He haspublished and lectured extensively on many of these issues. Because of this expertise, Mr.Thompson was selected by President Bush to serve on the National Risk AssessmentCommission, created under section 303 of the 1990 Clean Air Act Amendments.

Mr. Thompson received his B.A. degree in History from Princeton University and his law degreefrom the University of Virginia School of Law. He is a member of the American NuclearSociety; National Risk Assessment and Management Commission, appointed by President Bushin 1992; American Bar Association - Young Lawyers Section, Washington Liaison Committee,Vice Chairman (1973); Natural Resources Section, Coal Committee, Vice Chairman (1985);District of Columbia Bar Association; Federal Bar Association Agency Representative (FCC)(1973); Federal Communications Bar Association Luncheons Committee Chairman (1975-76);Virginia Bar Association, Phi Alpha Delta Legal Fraternity; The Lawyers Club of Washington;The Alfalfa Club; St. Timothy's School for Girls, Former Member, Board of Trustees;Washington Tennis Foundation, Former Member Board of Trustees; and an associate member ofthe Society for Mining, Metallurgy and Exploration of AIME.

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CHRIS PUGSLEYThompson & Simmons, PPLC (Counsel for WNI)

Summary:

Christopher S. Pugsley focuses his legal and political practice on environmental and energyissues as well as government contracting and regulation and constitutional issues. Many of theissues his practice involves include legislation, regulatory and contract counseling and litigation,contract drafting, and risk assessment and management.

On the legal side, Mr. Pugsley spent several months working with the Department of Justice'sCommercial Litigation Branch on issues related to the federal Commerce Clause, preemption ofstate regulation of various issues, and Fifth Amendment Takings claims. Mr. Pugsley's litigationexperience also includes working with private attorneys on the ongoing litigation between theDepartment of Energy and private electrical utilities regarding the proposed construction ofYucca Mountain and compensation from the Nuclear Waste Fund.

Mr. Pugsley's environmental practice consists of statutory and regulatory analyses of NuclearRegulatory Commission and Environmental Protection Agency issues related to the possessionand use of nuclear materials and the decommissioning of nuclear facilities. Mr. Pugsleycurrently serves as associate lead counsel for CFC Logistics, Inc., a commercial food processingand irradiation company, in licensing and litigation matters before the Nuclear RegulatoryCommission. In addition, Mr. Pugsley also works with the Food Irradiation Processing Allianceand the Gamma Irradiation Processing Alliance on health and safety and federal regulationsissues. Mr. Pugsley also has worked with the National Mining Association and other commercialuranium mining/processing companies on issues of concurrent federal/state regulation of nuclearfacilities and federal preemption of Atomic Energy Act regulatory authority, as well as issuesrelated to Nuclear Regulatory Commission regulations.

With respect to political issues, Mr. Pugsley currently works with several commercial companiesin assisting them to acquire government contracts with various executive agencies including theDepartments of Energy, Homeland Security, and Defense. Mr. Pugsley also serves as aconsultant for the Cherokee Nation on environmental matters and for Securit-e-Doc, Inc., aninformation technology company based in West Palm Beach, Florida.

Mr. Pugsley received his Bachelor of Arts degree in Politics from Washington and LeeUniversity in 1998 and his Juris Doctor degree from The George Washington University Schoolof Law in 2001. He is currently licensed to practice in the State of Maryland and is the author ofthe recently published article entitled The Game of "Wio Can You Tnrst? "-Equitable EstoppelAgainst the Federal Government, 31 Pub. Cont. L.J. 101. Mr. Pugsley is also the co-author ofseveral speeches and presentations including entitled Trusts and Long-Term Stewardship atDecommissioned Nuclear Facilities given at the Department of Energy's Long-Term

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Stewardship Workshop in July of 2001. In addition, Mr. Pugsley is the co-author of the bookOSHA Environmental Conmpliance Handbook: Third Edition to be published in the summer of2004 and the Fourth Edition to be published in the summer of 2005. Mr. Pugsley also acts as ahonorary judge for the American Bar Association's Law Student Division's National AppellateAdvocacy Competition.

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